Some employee conducts customer visits to conduct work related activities (as needed so frequency varies and irregular). It is a day trip only. The company allows them to buy food like light meals before, during, or after visit and the company reimburses it. Will this be considered FBT?
Hi @mjc2024,
FBT will apply to the reimbursement of light meals consumed during work-related customer visits in this scenario. Meals purchased during a normal workday are generally not considered deductible expenses for the employee, even if they are consumed while performing work duties. As a result, the 'otherwise deductible rule' does not apply, and the reimbursement is subject to FBT.
Meals consumed during a regular workday, even if related to work activities, are not treated as travel expenses for tax purposes. This is because the employee is not travelling away from their usual work location overnight or incurring expenses that would otherwise be deductible.
Thank you @JayATO,
In this scenario,
1) Can the minor benefits exemption apply?
2) If company issued credit cards were used by the said employees in purchasing the light meals, is this considered as property benefit?
3) are these tax deductible?
Thank you.
Hi @mjc2024
From what you've said, even though the frequency varies, this is a regular part of your employees role. That means it wouldn't be eligible for a minor benefits exemption.
The method of payment doesn't change the status of the benefit for FBT. Even if they pay with a company credit card it would still be considered a fringe benefit.
Because FBT is payable it is a deductible expense.
22 Apr 2024 · 3 min read time
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